Small-Premises pawn shop

Borrowers needing quick cash pay interest and fees. Bargain hunters, tradespeople and collectors buy the unredeemed goods.

Interest and fees on loans, plus the margin when unredeemed items are sold for more than the amount lent.

• Valuing jewellery, tools and electronics
• Careful record keeping
• Fair, calm dealing with customers
• Selling and pricing second-hand goods

• Pawnbroker licensing, which varies by province and municipality, so check before signing a lease
• Rules on reporting items to police, holding periods and checking for stolen goods
• Limits on interest and fees, including the Criminal Code interest rate cap, and loan disclosure rules. Get advice from a lawyer
• Commercial general liability and contents insurance, plus security against theft and robbery
• Your loan float is tied up in items, and misjudging a valuation can lose money
• A new shop may take months to build a customer base

Estimates suggest startup costs typically around $30,000 to $150,000, depending on premises, stock and your loan float. Your float is tied up in items, so a misjudged valuation can lose money.

Estimates suggest monthly revenue typically around $8,000 to $40,000, depending on location, loan volume and resale. A new shop may take months to build a customer base, so plan for a slow start.

Check pawnbroker licensing before signing a lease, as it varies by province and municipality. Also check rules on reporting items to police, holding periods, and interest and fee limits including the Criminal Code rate cap. Get advice from a lawyer.